Fund managers take on Kinghorn
The Age
Friday April 1, 2011
TWO prominent fund managers have squared up for a showdown with one of the most divisive figures in the Australian business community, John Kinghorn, lashing out at the RAMS Home Loans founder's proposed share buyback at RHG and moving to spill the board.Geoff Wilson from Wilson Asset Management and Karl Siegling from Cadence Asset Management, who together represent more than 8 per cent of shares in RHG the remnants of the failed RAMS business have expressed "concerns" at the buyback. They claim it has provided minority shareholders "with very limited options".They have called a special meeting of RHG shareholders at which they will seek to remove from the board Mr Kinghorn's co-founder of RAMS, Greg Jones, and their Krispy Kreme co-investor John McGuigan.They propose replacing them with Malcolm McComas, Gabriel Radzyminski and Paul Jensen.RHG last week announced a buyback at 88 for all outstanding shares in a $243 million capital return that would see Mr Kinghorn use shareholder money to tighten his grip on the company. The proposed return is well below the company's trading price and its asset value.Some shareholders argue the company is worth more than $1.50 and up to $2.Mr Kinghorn plans to delist the company and stop paying dividends."In our view, RHG should remain listed," Mr Wilson and Mr Siegling wrote. "The board should also be committed to making available surplus cash to shareholders by way of dividends (franked wherever possible) or by return of capital."Mr Wilson and Mr Siegling said they would propose to proceed with a buyback on terms "for the benefit of all shareholders".RHG is running down the original mortgage book from the RAMS business when it collapsed at the height of the global financial crisis just weeks after it listed in 2007.
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